Ireland's Trintech lists on Nasdaq, Neuer Markt

DUBLIN, Ireland (CBS.MW) -- Irish software specialist Trintech Group PLC gets points for bravery in its Friday debuts on the German Neuer Markt and the Nasdaq, a day after the technology-stock-laden U.S. stock market's composite index fell 3.8 percent.

Shares of Trintech
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which provides secure electronic payments for e-commerce, started trading in Frankfurt at $19.67 (12 euros), above the initial public offering price of 11 euros. Shares finished in Frankfurt at around 13 euros. The expected pricing range had been 9.25 to 11.50 euros.

The company issued 5.8 million shares, aimed at raising $63.8 million, with Deutsche Bank leading the underwriting.

Analysts were somewhat surprised that Trintech shares were able to catch the sun in the shadow of comments by Microsoft Corp.
MSFT, +0.92%
President Steve Ballmer. On Thursday, the executive from the world's leading software maker knocked technology shares for a loop by speaking of the "absurd" overvaluation of tech stocks. See full story.

The Neuer Markt, also rich with tech listings, finished 3.88 percent lower at 2,726.11, while the German DAX Xetra lost 2.1 percent, or 113 points.

"Any stock that went up in this market has outperformed," said Michael Schatzschneider, a telecommunications and technology analyst with BHF-Bank in Frankfurt.

Technology on the Emerald Isle

Trintech's headquarters are split between Silicon Valley in California and Dublin, Ireland. "Ireland is fast-growing, and technology has phenomenally been embraced," said Bill Howard, an analyst with Fox Pitt-Kelton in London. He said big U.S. technology companies such as Dell Computer Corp.
DELL, +0.47%
have sought out Ireland partly because of tax advantages and low overhead costs.

One of Trintech's selling points amid growing competition for secure payments is its alliances with such heavyweights as Visa and Compaq Computer Corp.
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It's the first time Visa has ever invested in a payment-technology company, although analysts pointed out that the public, at least in Europe, still isn't 100 percent comfortable buying goods over the Internet.

Trintech's annual sales in 1997 totaled $16 million, according to the company, and that number jumped by nearly a third to $21 million a year later. What's more, Forrester Research has projected that e-commerce transactions in the United States alone will be worth an aggregate $1.3 trillion in 2003.

Trintech boasts of leading the development of Secure Electronic Transaction (SET), the protocol developed by Visa and MasterCard. The company offers end-to-end solutions for banks, merchants and consumers.

Cautious times, flooded markets

Analysts said Trintech's shares were helped by the fact that it didn't delay its IPO, whereas wary German investors have had to endure at least five recent delays.

Heiko Bienick, chief analyst with Independent Research in Frankfurt, said his firm is going to wait and see how Trintech performs before recommending that clients buy the shares.

He said the Neuer Markt is currently flooded with companies, many foreign, that want to list. His firm recently attended seven out of 15 presentations from companies looking to list on the index. In a normal week, they'd attend two or three, he said.

He said some investors are wary that foreign companies are now flowing into the Neuer Markt with little understanding of German markets and their eyes on a fast buck. "People are watching them with skepticism. A lot of private investors have had their fingers burned in the last month, and institutional investors haven't enough money to buy every new company coming onto the market," said Bienick.

Stefan Albrecht, managing director of Internet investment bank Net.IPO in Germany, said many technology companies are making a beeline for the Neuer Markt, which, he said, is favored over the Brussels-based Easdaq as the index for technology shares in Europe. "Companies are looking for an alternative to the Nasdaq," he said.

As far as Trintech, Albrecht said it fared well on its opening day because it wasn't priced too high and the company is seen as a quality operation. The fact that it's based partly in the United States and is not solely focused on Europe has also encouraged investors, he said.

"After the summer," Albrecht said, "there was too much paper in the pipeline, but quality issues are still in favor."

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